Australian Hoteliers Are Having a Hard Time Finding Space for a Record Number of Chinese Tourists

Australia has created an enticing recipe to attract more Chinese tourists in adding more flights, offering 10-year visas and promoting a better exchange rate. Some Australian hoteliers, however, feel there aren’t enough hotel rooms in the country to keep pace with demand from China and other large international markets.

Australian destinations are particularly focused on attracting Chinese tourists this year because governments from both countries declared 2017 the China-Australia Year of Tourism which involves various trade shows, events and marketing campaigns in both countries to promote one another as destinations.

Chinese tourism to Australia is at a record high — some 1.1 million Chinese travelers visited the country last year and more than 300,000 already visited in January and February. Qantas Airways, Australia’s flag carrier, said it’s seen a boon from Chinese travelers flying to and domestically within the country.

But Australia risks losing Chinese market share from an inadequate hotel supply, said Matt Bekier, CEO of Star Entertainment Group, speaking to CNBC this week (watch video). “It’s fascinating that while we’re high-fiving each other about how great we are in getting the Chinese tourists to come to Australia, we’re losing market share,” Bekier told CNBC. Star is one of Australia’s largest gaming and casino companies with properties and resorts in Sydney and Brisbane, for example.

More flights from China from carriers such as Qantas and a 10-year trial visa program have helped Chinese travelers book trips faster than some hotels can keep up, said Bekier. “And that’s one of the main reasons for us to invest so much money and build up our hotel capacity as quickly as possible,” he said. “If you don’t have the hotel product to accommodate people, you can’t monetize the opportunity.”

Bekier also said hotels should ensure their customer service models are aligned with Chinese travelers’ expectations. “If you look at Chinese tourists, many of them are spending in the four and five-star category for accommodation and that’s where we actually need the capacity,” he said. “We need to get a lot more product up to that level where we’re competitive with the best product in Hong Kong, London or New York.”

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